SBP releases unified QR code to speed up digital payments – Business & Finance
KARACHI: In order to accelerate the digitization of retail payments, the State Bank of Pakistan (SBP) has released standards for Quick Response (QR) code-based payments in Pakistan.
A specific standard for QR codes (QRC) for merchant payments, as well as person-to-person (P2P) payments in Pakistan has been released with the aim of standardizing QR issuance and acceptance practices in the country . The goal of issuing the QR Code Standard for Payments is to provide interoperability by ensuring that all QR Code reading devices, including mobile phones, are able to scan any QR Code and Process payments seamlessly, regardless of issuer or system.
These standards must be met for issuing QR codes and accepting payments using them. This initiative is part of SBP’s desire to promote inclusion, innovation and modernization of payment systems in the country.
So, from July 1, 2022, all new QR codes will be issued in accordance with the new standard. Similarly, all issuers will develop their QR reader/scanner systems to adopt the attached standard no later than June 30, 2022. Existing QR codes issued by acquirers must also be replaced in accordance with the new standard by June 30, 2022. June 30, 2022.
According to SBP, the development and issuance of a unique QR code was announced earlier by the Governor of the State Bank of Pakistan, Dr. Reza Baqir, while chairing the 5th Stakeholder Consultation Meeting on digital financial services in August 2021. With the issuance of a unique QR code wide QR code standard Pakistan joins the list of countries that have taken similar steps to promote low-cost digitization of payment services, especially at of retail.
QR code-based payments are becoming increasingly popular around the world as they are inexpensive and easy to use through mobile apps. However, in Pakistan, QR codes issued by financial institutions are generally not based on a common industry standard and have limited interoperability due to which their acceptance and use in the country is very low.
Accordingly, the Common QR Code Standards were developed by an industry advisory group, formed by SBP, and are based on EMVCo’s QR Code Specifications for Merchant Payments. EMVCo is a global technical body that facilitates global interoperability and acceptance of secure payment transactions by managing and evolving EMV specifications and associated testing processes.
The standards are designed to be flexible to accommodate new and innovative use cases, with data objects allocated to schema, acquirers, and SBP for future use.
To facilitate the issuance and adoption of QR code-based payments, SBP has released its two variants: one for person-to-person payments and the other for person-to-merchant payments. The Person to Person (P2P) standard would be used by banks and financial institutions to generate personalized QR codes for their customers, using which they could receive payments on their mobile apps.
Similarly, the Person-to-Merchant standard would be used to accept and process merchant-based payments, using mobile apps, on lines similar to accepting card payments. All financial institutions offering digital payment services would be required to comply with the new requirements and ensure that the mobile apps of all banks and other payment institutions in Pakistan are able to scan and process any QR code issued. in accordance with the new standard no later than June 30, 2022.
The standards also encourage the establishment of national payment systems, which will provide an efficient and cost-effective payment alternative to Pakistani citizens. Additionally, it will enable a fully interoperable mechanism for QR issuance with integrated information of multiple payment schemes in a single QR code, allowing the customer to choose from a range of available schemes.
This will lead to the elimination or reduction of the number of multiple QR codes at merchants. It can be mentioned that SBP has also recently launched the person-to-person (P2P) version of its instant payment system, Raast, which will also offer a fully interoperable payment mechanism for QR-based payments.
With the release of the QR Code Standard Guidelines, State Bank aims to further improve the availability and promote the use of low-cost digital payment acceptance points (i.e. QR codes) in all the countries. The new QR Code standard would simplify the customer experience for paying or accepting digital payments in their daily lives, such as for groceries, paying school fees, paying bills, online shopping, services carpooling, in addition to allowing P2P fund transfers, i.e. transfers of funds between people.
Copyright Business Recorder, 2022